THE RESERVE
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THE RESERVE
DECLARATION
COMMUNITY BUDGET OVERVIEW
The budget for a Homeowners Association (HOA) serves as a crucial financial tool that ensures the community's financial health, supports operational needs, and aligns with the association's long-term goals. The key purposes of an HOA budget include: Financial Planning, Operational Management, Reserve Fund Allocation, Assessment Calculation, Transparency and Accountability, Compliance with Legal and Governing Documents, and Long-Term Sustainability. In summary, an HOA budget is essential for maintaining financial stability, fostering community trust, and ensuring the smooth operation of the association’s responsibilities.
ARTICLE 11
BUDGET & ASSESSMENTS
Section 11.1.1 | Preparation of Budget
Not less than thirty (30) days before the end of the fiscal year, the Board shall prepare a budget for the Association for the coming year. In preparing its budget, the Board shall estimate the Common Expenses and Specially Allocated Expenses of the Association to be paid during the year, make suitable provision for accumulation of reserves, including amounts reasonably anticipated to be required for maintenance, repair, and replacement of the Common Elements and the Limited Common Elements, and shall take into account any surplus or deficit carried over from the preceding year and any expected income to the Association.
Section 11.1.2 | Ratification of Budget.
Within thirty (30) days after adoption of any proposed budget for the Condominium, the Board shall provide a summary of the budget to all the Owners and shall set a date for a meeting of the Owners to consider ratification of the budget not less than fourteen (14) nor more than sixty (60) days after mailing of the summary. Unless at that meeting the Owners to which a majority of the votes in the Association are allocated reject the budget, the budget is ratified, whether or not a quorum is present. In the event the proposed budget is rejected or the required notice is not given, the periodic budget last ratified by the Owners shall be continued until such time as the Owners ratify a subsequent budget proposed by the Board. A budget ratified as here provided may not be invalidated because of the Association's failure to comply with duties imposed by the Governing Documents and by the Condominium Act to prepare or revise a Reserve Study.
Section 11.1.3 | Supplemental Budget
If during the year the budget proves to be inadequate for any reason, including nonpayment of any Owner's Assessment, the Board may prepare a supplemental budget for the remainder of the year. A supplemental budget that results in an increase in any Owner's Assessments must be ratified pursuant to Section 11.1.2.
Section 11.1.4 | Assessments for Common Expenses and Specially Allocated Expenses
The amounts required by the Association for Common Expenses and Specially Allocated Expenses as reflected by the' annual budget and any supplemental budgets shall be divided into installments to be paid each month over the period of time covered by the budget or supplemental budget. The monthly Assessment for each Unit is the total of (a) the Common Expense Liability of that Unit times the total monthly installment for Common Expenses for all Units; and (b) any Specially Allocated Expenses for the Unit.
Section 11.1.8 | Notice of Assessments
The Board shall notify each Owner in writing of the amount of the monthly general and Special Assessments to be paid for the Owner's Unit and shall furnish copies of all budgets and the Common Expense Liability allocations which apply to the Unit, on which the general and Special Assessments are based. The Board shall furnish the same information to an Owner's Mortgagee if so requested.
Section 11.1.11 | Failure to Assess
Any failure by the Board or the Association to make the budgets and Assessments hereunder before the expiration of any fiscal year for the ensuing fiscal year shall not be deemed a waiver or modification in any respect of the provisions of this Declaration, or a release of the Owners from the obligation to pay Assessments during that or any subsequent fiscal year, and the monthly Assessments amounts established for the preceding fiscal year shall continue until new Assessments are established
ARTICLE 12
COMMON EXPENSES AND ASSESSMENTS
Section 12.1 | Estimated Expenses
Within sixty (60) days prior to the beginning of each calendar year, or such other fiscal year as the Board may adopt, the Board shall estimate the charges including Common Expenses, and any special charges for particular Units to be paid during such year, shall make provision for creating, funding, and maintaining reasonable reserves for contingencies and operations, as well as for maintenance, repair, replacement and acquisition of Common Elements, and shall take into account any expected income and any surplus available from the prior year's Operating fund Without limiting the generality of the foregoing but in furtherance thereof, the Board shall create and maintain from regular monthly Assessments a reserve fund for replacement of those Common Elements which can reasonably be expected to require replacement or a major repair prior to the end of the useful life of the Buildings The Board shall calculate the contributions to said reserve fund so that there are sufficient funds therein to replace or perform such major repairs to each Common Element covered by the fund at the end of the estimated useful life of each such Common Element The initial Board whether elected by Declarant or elected by Unit Owners, may at any suitable time establish the first such estimate If the sum estimated and budgeted at any time proves inadequate for any reason (including non-payment for any reason of any Owners Assessment), the Board may at any time levy a further Assessment, which shall be assessed to the Owners according to Section 12 4 Similarly if the sum estimated and budgeted, and being collected and/or already collected, at any time proves excessive, the Board may reduce the amount being assessed and/or apply existing funds (in excess of current needs and required reserves) against future Assessments and/or refund such excess funds